rocimamaz Of The World Bank FOR OMCIAL USE ONLY >AJ :3 -7 C J / RepOt NO. P-6003-PA NEMORANDUM AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED LOAN IN AN AMOUNT EQUIVALENT TO US$50.0 MILLION TO THE REPUBLIC OF PARAGUAY FOR THE NATURAL RESOURCES MANAGEMENT PROJECT JANUARY 31, 1994 MICROGRAPHICS Report No: P- 6003 PA Type: MOP This document has a resticted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without W.orld Bank authorization. CURRENCY EQUIVALENTS Currency Unit - Guarani (G) EXCHANGE RATE (as of January 21, 1994) US$1.00 = G1,850 Gl.CO = US$0.0005 FISCAL YEAR January 1 to December 31 WEIGHTS AND MEASURES The metric system has been used throughout the memorandum. ABBREVIATIONS AND ACRONYMS CAH Smallholder Credit Agency CAS Country Assistance Strategy CICAR Rural Research and Training Center CPI Consumer Prices Index CRAE Regional Environmental Center DGP Planning Directorate (of MAG) DINCAP National Directorate for Project Coordination and Administration (of MAG) EA Environmental Assessment FOCORN The Natural Resources Conservation Fund GOP Government of Paraguay IBR Rural Welfare Institute INDI Paraguayan Institute for Indigenous People LURP Land Use Rationalization Project MAG Ministry of Agriculture and Livestoc}& MEC Ministry of Education MH Ministry of Finance MIC Ministry of Industry MOPC Ministry of Public Works and Communications MSPBS Ministry of Health PHRD Policy and Human Resources Development Fund PTI Program of Targeted Intervention SGA Subsidiary Grant Agreement SSRNMA Sub-Secretariat of Natural Resources and the Environment (of MAG) UNDP United Nations Development Program UCTAP Project Technical and Administrative Coordination Unit FOR OMuCL4L USE ONLY PARAGUAY NATURAL RESOURCES MANAGEMENT PROJECI I. LOAN AND PROJECT SUMMARY The Republic of Paraguay Executin _Aencies: The Ministry of Agriculture and Livestock (MAG) The Ministry of Public Works and Communicatons (MOPC) The Paraguayan Insdtute for Indigenous People (INDI) The Smallbolder Credit Agency (CAH) The Ministry of Education (MEC) The Ministry of Health and Welfare (MSPBS) Beneficiaries: MAG, MOPC, INDI, CAH, MEC, MSPBS, and small farmers and indigenous communities withi the Departments of Alto ParanA and Itapua. Loan Amount: US$50.0 million equivalent Terms: Twenty years, including five years of grace, with amortization on an annity basis, at the Bank's standard variable interest rate. Financing Plan: Government of Paraguay US$22.0 million 1BRD US$50.0 million Producers S$ 7.1 mllion Total US$79.1 million Economic Rate of Return: Not applicable Poverty Category: PTI. Indigenous communities and small farmers will benefit from project actions designed to increase and maintain incomes from agricultural production. Staff Appraisal Report: Report No. 11606-PA Maps: IBRD Nos. 24200, 21201 & 24303 This documerI has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. - 2 - MEMORANDUM AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED LOAN TO THE REPUBLIC OF PARAGUAY FOR THE NATURAL RESOURCES MANAGEMENT PROJECT 1. The following memorandum and recommendation on a proposed development loan to Paraguay for US$50.0 million equivalent is submitted for your approval. The proposea loan would be on standard Bank terms with twenty years' maturity, a grace period of five years and a variable interest rate. It would help to finance a Natural Resources Management Project. 2. Backdround: The agricultural sector has played an important role in the impressive economic performance achieved by Paraguay since 1970, and represents one of the most promising sources of further export-driven growth. The sector generates 30% of GDP, employs 40% of the work force, and provides 90% of registered merchandise exports. Agricultnual products are an important source of raw materials for industry, and agro- industry contributes some 50% of total industrial value-added. 3. The development models emphasizing industrialization and urban growth which characterized many Latin American countries in the period following the second World War were not adopted in Paraguay, which has the lowest level of urbanization in the region. Almost 60% of the population of 4.4 million lives in the rural areas. Instead of a tendency towards rural-urban migration, with the resultant increase in the number of marginalized poor experienced by so many countries, Paraguay has achieved a deconcentration of its population through settlement of previously-undeveloped parts of the country. However, this strategy is rapidly approaching its limit. 4. The different stages of Paraguay's agricultural development have been extractive and/or exploitive of natural resources. With land as an abundant factor, the natural renewal of fertlity and the low level of intensity of land use allowed this to operate as a sustainable form of production for a long period. Beginning in the early 1970s, however, the agricultural sector and the economy as a whole underwent important structural changes. The Government's major road-building programs quickly put vast, and hitherto undeveloped, areas within economic access, and large tracts of state land (tierras fiscales) were distributed to both large and small farmers. By the 1980s, the agricultural sector had become one of tae most dynamic sectors of the economy, driven by export demand and based primarily on the extension of the cultivated area at the expense of the natural forest. 5. Large-scale intemal migraton of peasants occurred, coupled with the arrival of many small- and medium-scale farmers from neighboring countries, mainly Brazil. Between 1960- 1970, an estimated 400,000 people moved to the new lands of the east and north-east. The early emphasis on seting peasants was replaced by the introduction of large-scale operations, with significan capital resources and a modern, higher technology approach to agriculture. Only in the past 30 years has a trly national agrarian economy been created, -3A 4h- A.'"--r nt - -unc nf ,nf the aneicltvirul sectnr have left their mark on the - 3 - structures of land-holding and production. Indigenous hunter/gatherers, extensive cattle ranchers, and Miniflundiolmicrofundio subsistence farmers are all present. in addition to numerous forms of production based on small-, medium- and large-scale commercial farms. 6. This social and economic development strategy has increased the absolute and relative importance of the agricultural sector, but has not had a balanced impact on the rnual population. The acceleration of agricultural growth at the expense of the natural forest has meant that the frontier of agricultural production based on the extension of the cultivated land awea will soon be reached. The rate of deforestation and incorporation of land into productive use has, in fact, accelerated in the aftermath of the change in govermment in 1989, as large land-owners have sought to avoid illegal occupation by the landless and/or expropriation by the State for settlement purposes. In addition, there is a potentially serious problem of increasing degradation and erosion of soils in the areas already taken into production. After more than two decades of dynamic agricultural growth, Paraguay is rapidly approaching a crucial juncture in the development of its rural areas; the strategy to be adopted must go beyond the confines of purely agricultural development, and must emphasize increases in output and productivity in tandem with a heightened concern with the environment and the preservation of natural resources. 7. The challenge now facing the government is that of orchestrating the change from horizontal development (i.e., expansion of the productive area) to the vertical development of agriculture by adopting measures to improve productivity and increase output on a sustinable basis; its strategy must also take account of the major population growth being experienced. The key issues in the agricultural sector are: (a) the use and protection of natural resources in sustainable agricultural production systems; (b) the skewed distnrbution of land, and the land tenure system; (c) the weakness and fragmentation of sector institutions; (d) the lack of agricultural strategy and policy, and of information for their formulation; (e) the low level of taxation of agriculture and the lack of efficient tax instruments; and (t) the growing pressure on indigenous communities in the competition for natural resources. 8. Ratdonale for Bank havolvement: The most recent Board discussion of the Country Assistance Strategy (CAS) was on December 21, 1993. The CAS drew attention to the critical issues in land use and resource conservation and to the need for a change in agricultural development strategy. The Bank's strategy focuses on three main objectives: (a) private sector development; (b) agricultural development and natural resource management; and (c) poverty alleviation and human resource development. It also draws attention to the need to ensure that all operations supported by the Bank should strengthen and modernize the insttutions involved, particularly given the needs of deconcentration and decentralization of Govemment activities. 9. The agricultural sector of Paraguay faces a number of serious issues which camot be resolved in a single project. The present natural resource use and agricultural development strategy must undergo a major transformation. Bank strategy is to support Paraguay's shift from an extensive model of agricultural expansion to growth through intensification, with emphasis on sustainable resource management and environmental protection. The transiton from an extensive agriculture to more intensive and sustainable agriculture in a framework of appropriate natual resource management will require: (a) an improved knowledge of land ownership, its capability and actual use; (b) an enhanced role for the Goverment in the provision of basic services, which will itself require major instutonal change; and (c) the -4- preparation and introduction of the necessary framework of incentives and restrictions concerning land use. 10. The Bank, through its support of the Land Use Rationalization Project (LURP) - Ln. 3445-PA - and the implementation of Japanese PHRD grants, is playing a key role in the definition of issues and the available means to resolve them. The multi-purpose cadastre which will result from the LURP will provide the Government with the necessary technical basis to tax agriculture; in a planned future operation, the cadastral data base would be employed to improve the system of land tiing. The preparation of the technical basis for agro-ecological zoning and the accompanying body of legal and policy measures is being carried out under the first Japanese PHRD grant, executed by the Bank. It will be completed by early 1994, and its recommerndation will be the basis for a dialogue between the Bank and the Govermnent. The application of the agreed recommendations at the level of the whole Eastern Region would be pursued under the proposed Natural Resources Management II Project, the preparation of which is to begin shortly under the third Japanese PHRD Grant. 11. Mreet Ojectives: The objectives of the project would be: (a) to establish the institutional framework necessary to deal with the major agricultural and natural resource problems of the project area; (b) to generate information through research and implement an area-wide system of natural resource protecfion; (c) to assist small farmers in the establishment of sustainable, diversified agricultural production systems and conservation measures; and (d) to encourage the direct participation of the local population in project im-plementation. The project would increase the productivity and incomes of small farmers, to enable them to accumulate capital and put the development process on a self-sustaining basis. It would seek to alter the attitudes of the rural community toward natural resource mnanagement and to develop a consensus on its importance and value. The project would seek the participation of the population in the project through the stimulation of cooperatives, local government and other institutions. 12. Project Desritlon: The project would have five components. An Agricultural Development Component would assist in the restrucuring of the productive process towards sustainable, conservation-oriented agriculture. The component would support agricultura! and forestry research, strengthen extension and the protected areas, and plan and implement programs of actions to slow down and ultimately reverse the degradation of natural resources, targeted at individual catcbment areas. The component would cost US$46.4 million, including contingencies (58.6% of total project costs), of which US$32.0 million would represent investment costs, including structures, and vehicles and equipment, land acquisition, on-farm investments in resource protection, training and technical assistance. 13. An Indigenous Communities Component would provide assistance to the remaining indigenous population of the project area. The component would expand the area dedicated to indigenous people and regularize land tenancy. It would also provide assistance to improve and diversify agricultural production and to improve their physical well-being. The component would cost US$3.4 million, including contingencies (4.3% of total project costs), of which US$2.4 million would represent investment costs, including the acquisition of land, vehicles and equipment, and technical assistance. 14. An Infrastructural Development Component would realign, rebuild, improve and maintain part of the existing rural road network to reduce negative environmental effects and -5 - to support the process of agro-ecological land use zoning. Rural roads would be realigned or rebuilt, and provision would be made for adequate maintenance. The component would cost US$15.4 million, including contingeilcies (19.5% of total project costs), of which US$15.1 million would represent investment costs, including the construction of roads and the acquisition of road maintenance equipment. 15. An Institutional Development Component would strengthen the institutons involved in project implementation. The component would support the decentralized administration of the project, and provide the necessary technical assistance and training both for existing and newly-created entities. The component would cost US$5.1 million, including contingencies (6.5% of total project costs), of which US$1.3 million would be for investment, including the acquisition of vehicles and equipment, training and technical assistance; and 16. A Pilot Agricultural Credit Component would support investments by small farmers in productive activities. The component would finance up to 70% of individual sub-projects, and would include support for the training and mprovement of operational efficiency of the Sma11holder Credit Agency (CAH). The component would cost US$8.8 miniop, including contingencies (11.1 % of total project costs), which would include US$0.6 millioni of investment by CAH in the acquisition of equipment, training and technical assistance, and US$1.0 million of operating costs. 17. The estimated project costs and financing plan are shown in Schedule A. The amounts and methods of procurement and disbursement and the proposed disbursement schedule are shown in Schedule B. A timetable of key processing events and the status of Bank GrouP operations in Paraguay are shown in Schedules C & D, respectively. The Staff Appraisal Report No. 11606-PA, dated January 31, 1994, is attached. 18. ProJoect Implementation: The responsibility for project management would lie with the Ministry of Agriculture (MAG). Under the overall coordination of its National Directorate for Project Coordination and Administration (DINCAP), MAG would create by Decree three new administrative units required for project implementation, to be located in the project area. These entities would be the Project Technical and Administrative Coordination Unit (UCTAP), the Rural Research and Training Center (CICAR), and the Regional Environmental Center (CRAE). The structure and levels of authority of these implementing entities would be defined in detail in the Decrees which would establish them and which would describe the functions of existing MAG agencies. The Government will give the relevant agencies the legal power and necessary degrees of administrative freedom to perform their duties effectively. 19. Aeed Actions: Agreement was reached between the Government and the Bank on the following: (a) that a joint review would be carried out by June 30, 1994, by the Bank and the Government of the technical basis for agro-ecological zoning and the accompanying body of legal and policy instruments; and that, by December 31, 1994, the Government would provide the Bank with an action plan on the appropriate mechanisms and timetable for the implementation of agreed proposals; (b) that the Govermment would provide to the Bank a resettlement plan or plans, including a compensation plan, in the event that it were to undertake any resettlement action affecting the population within the boundaries of the San Rafael National Park or any area to be expanded for the benefit of indigenous peoples; (c) the terms of reference for the preparatory studies for new national parks, and the draft - 6 - management plans for the Kyri'y reserve and the N4acunday protection area; (d) the drafts of the Regulations, the Operating Manual and the Model Contract of the Natural Resources Conservation Fund (FOCORN); (e) the draft legal instruments for land acquisition and regularization of tenancy for indigenous people; (f) the request for pre-qualification by consultants and the terms of reference for road design, amd a schedule of monitorable actions associated with road design; (g) the Decrees: (i) establisling UCTAP, CICAR and CRAB; and (ii) describing new functions for MAG administrative units; (h) the agreements (convenios): (i) to be signed between MAG and the implementing and cooperating agencies; and (ii) the model agreement between MAG and the project area Municipalities; (i) the draft Management Services Agreement with UNDP; (ji the Terms of Reference for studies and technical assistance to be undertakcn by CAH; (k) CAH's: (i) Subsidiary Grant Agreement (SGA) and Credit Regulations; (ii) necessary actions to limit the portion of its outstanding loans affected by arrears of more than 90 days to 10% of its total loan portfolio; and (iii) or.- lending terms; (1) procurement; (m) chronograms of the main activities of the five proposed project components; (n) the staffing and s-upport requirements of the monitoring and evaluation unit to be established in MAG; (o) audit requirements and procedures acceptable to the Bank; (p) timing for the submission of the Annual Operating Plan and reporting procedures; and (q) timing and scope of annual and interim reviews. 20. Conditions of Effectiveness and Disbursement: Before the effectiveness of the proposed loan, the following conditions would be met by the Borrower: (a) the entry into effect of the SGA governing the transfer of funds to INDI, and the contractual arrangement between INDI and IBR; (b) the entry into effect of the SGA governing the transfer of funds to CAH; (c) the legal opinion confirming the primacy of the signed loan agreement in procurement issues; (d) the entry into effect of the Decrees establishing UCTAP, CICAR and CRAE, the appointment of qualified staff to head such units, and the entry into effect of the Decree describing new functions for existing MAG administradve units; (e) the implementation of the first phase of DINCAP's action plan; (t) the adoption by UCTAP of an adequate accoundng system; (g) the entry into effect of the convenios to be signed between MAG and the project's executing and cooperating agencies; (h) the entry into effect of the UNDP agreement; and (i) the establishment of the Regional Operations Committee (COR). 21. The conditions of disbursement would be: (a) of the protected areas program of the forestry and environmental conservation sub-component, that the Govermment would provide to the Bank a resettlement plan, including a compensation plan, if it were to undertake a resetdement action affecting the population within the boundaries of the San Rafael National Park; (b) of the FOCORN sub-component, that the fund and its account had been established, and that the FOCORN Operating Regulations had been approved; (c) of the Indigenous communities component, that INDI had adopted an appropriate accounting system; and (d) of the pilot agricultural credit component, that (i) CAH had provided evidence of staff training for environmental review of sub-loan applications; (ii) that CAH had developed and implemented the necessary accounting systems; and (iii) that the modifications to the Credit Regulations and operational procedures incorporadng the necessary enviromnental safeguards and provisions had entered into effect. 22. Project Beneflts: The project has been designed to initiate a process of change in the use of natur resources in the project area. Improvement in land use will ultimately come from a combination of incentives and restictions. The incentives must come mainly from an inQrease in output, productivity and net farm income, and in the achievement of this the public sector will play a catalytic role. The project represents a first phase initiative to alter radically the use of natural resources in agriculture. The restrictions would follow from the enforcement of land use and conservation criteria, based on the agro-ecological zoning exercise for the whole of the Eastern Region and associated legal and policy studies, as described in para. 10 above. 23. The proposed project would address many issues which are generic to agricultum in the whole of the Eastem Region, and their successful resolution in the project area would allow the replication of project activities and experiences in other areas. Bank involvement in the conception and preparation of this project has already been a catalyst in the definition of a new approach to the use of natural resources in Paraguay. Though still at a very early stage, this approach is the only realistic hope of sustaining the growth of output in the long term and of mitigating the effects of the migration of landless and impoverished people into the urban sector. A number of difficult political decisions will be required, and the Bank's presence will be invaluable in the maintenance of a steady course. 24. The benefits of the project would result from: (a) short-, medium- and long-term financial benefits realized from the adoption of on-farm investment plans; (b) medium- and long-term economic benefits accruing from the maintenance of the productive resource base; and (c) improved management of protected areas, stabilization of indigenous people, improved living conditions in the rural areas, and institutional development. 25. Environmental Aspets: The environmental problems being encountered in the project area as the result of the rapid and uncontrolled expansion of agriculture at the expense of the natural forest are serious. The existing model of land use is not sustainable, and only by combining appropriate systems of agricultural production in harmony with the management of natural resources can an equilibrium be achieved. In broad terms, what is good for the environment is also good for a model of agricultural development which is sustainable in the long term. 26. The project has an Environmental Assessment category A. The terms of reference and work program for the Environmental Assessment (EA) were prepared during the pre- appraisal by Bank staff in conjunction with staff of the SSRNMA and members of the project preparation team. The EA was carried out by a team of consultants, and was presented to the Bank in June, 1992. The EA followed methodology and guidelines appropriate to a regional environmental assessment, which considered the project as a whole as presented in the Government's project preparation document. The EA explicitly recognized that the project aims at reversing the present abuse of natual resources by promoing diversified and sustainable production systems. Its findings were taken into account in the further processing of the loan, and the summary of the EA was distributed to the Executive Directors in September, 1992. 27. PgEar R on: Environmental degradation in Paraguay worsens the exposure of the rural poor to the risks of further impoverishment. Inadequate natural resource management practices, particularly those resulting in severe soil degradation, tend to reduce farm income and increase its variabilty. Under the project, the growth prospects of smallholders and indigenous commuities would be improved. Technical and financial support for the adoDtion of environmentally-sound Droduction technologies. rehabilitation and - 8- modernization of basic rural infrastructure, and improved access to formal sources of credit will increase productivity and create an economically-viable alternative to the existing pattern of natural resource mining. 28. As part of the Bank's poverty reduction effort, the project is also aimed at developing human capital able to implement an environmentally-sound agricultural sector growth strategy. The decentralization of project administration to regional entities (i.e., UCTAP, CICAR, and CRAE) and the active participation of local organizations such as Agncultural Credit Users' Associations and Local Roads Committees would promote better access for smallholders to the decision-making process, improving channels of communication and government's responsiveness to local needs. '9. Risk and ianty: Institutional weakness is an acknowledged risk of the project. The project's institutional structure has been carefully designed, but its implementation will demand considerable adjustment to established patterns of behavior in multiple institutions where over-entralization and control have been more important in the past than efficiency and results. The project would include an active program of institutional development, and monitorable indicators will allow progress to be followed closely during supervision and mid- term review. The project aims to slow down and ultimately to provide the basis for the reversal of a depredatory approach to natural resource use. This will depend on a consistent message from the Government and the provision of a framework of incves and penaltes. In some cases, short-term political expediency may run counter to the requirements of the necessary long-term strategic approach. The government itself must be assisted in the analysis of the problems faced by the agricultural sector. 30. Re tin: I am satisfied that the proposed loan would comply with the Articles of Agreement of the Bank, and recommend that it be approved by the Executive Directors. Lewis T. Preston President Attachments Washington, D.C. Jamary 31, 1994 Schedule A PARAGUAY NAfTUL RESOURCES MANAGEMENT PROJECT Estimated Costs and Financing Plan Foreign Total -US$ million -------------- -- Agricultural Development 31.0 11.8 42.8 Indigenous Communities 2.8 0.4 3.2 InfrastMu 6.4 6.5 12.9 Institutional Development 3.9 0.6 4.5 Pilot Agricultural Credit 4.8 3.8 8.6 Total Baseline Costs 48.9 23.1 72.0 Contngencies: Physical 1.1 1.2 2.3 Price 3.4 1.4 4.8 Total Project Costs 53.4 25.7 79.1 - IBRD 29.0 21.0 50.0 Government 20.8 1.2 22.0 Producers 3.6 3.5 7.1 Total 53.4 25.7 79.1 Schedule B Page 1 of 2 PARAGUAY NATURAL RESOURCES MANAGEMENT PROJECT Procwrment Methods and Disments (US$ million, including taxes and duties>" Procurement Method Project El. inent ICB LCB Other NBFv Tot 1. WVorks 1.1 Constiuction/rehabilitation of 1.9 1.9 offices and other buildings (1.5) (1.5) 1.2 Road rehabilitation 13.2 13.2 (10.4) (10.4) 2. , 2.1 Vehicle; 1.7 1.7 (1.6) (1.6) 2.2 Road maintenance equipment 1.2 1.2 (1.2) (1.2) 2.3 Miscellaneous equipment and 1.0 0.4 1.4 materiaLs (0.9) (0.4) _ (1.3) 3. Services 3.1 Traning 3.7 3.7 (3.6) (3.6) 3.2 Studies/research 3.6 3.6 (3.4) (3.4) 3.3 Technical assistance 5.8 5.8 ___ __ __ ___ __ __ __ ___ __ __ _ (5-5) (5.5) 4. Other Expendimres 4.1 Operating expenditures 20.7 20.7 4.2 Land acquisition 8.8 8.8 4.3 FOCORN grants 5.0 5.0 (5.0) (- 4.4 Pilot credit sub-loans 5.0 5.0 (5.0) (5-0) 4.5 Producers 7.1 7.1 _____________________________________________ (-) (-) TOTAL 16.1 2.9 44.2 15.9 79.1 (13.2) (1.5) (35.3) (-) (50.0) 1/ Figures in parentheses are the respective amounts to be financed by the Bank loan. 2/ NBF: non-Bank finaced. Schedule B Page 2 of 2 Disbursentsu: Percentage of expenditure Category Amount of Loan Allocated to be financed (US$ million equivalent) 1. Civil works and construction 11.9 79 2. Goods 4.1 95 3. Services 12.5 97 4. Other Operating costs, personnel 11.5 55 l/ Advances under: FOCORN 5.0 100 CAH Credit 5.0 100 Total 50.0 1/ Average: expenditures will be fiaced on a declining basis. Estimated IBRD Disbursements: IBRD FY 1995 1996 1997 1998 1999 2000 2001 2002 ---------US$ million-- ----- Annual 2.3 1.5 7.5 8.0 10.0 10.0 10.0 0.7 Cumulative 2.3 3.8 11.3 19.3 29.3 39.3 49.3 50.0 Schedule C PARAGUAY NATURAL RESOURCES MANAGEMENT PROJECT Timetable of Key Processing Events 1. Preparation Period: Identification mission: March, 1990 Preparation period: March - December, 1991 2. Prepared by: IBRD/MAG Project Preparation Unit, with initial support from FAO/CP 3. First IBRD Mission: November, 1989 4. Pre-Appraisal Mission: February, 1992 5. Appraisal Mission: June, 1992 6. Negotiations: April to November, 1993 7. Planned Date of Effectiveness: August, 1994 8. List of Relevant PCRs and PPARs: Project Performance Audit Report: Third Livestock Project, Report No. 1991, March 1978. Project Performance Audit Report: Fourth Livestock Credit Project, Report No. 3457, May 1981. Project Performance Audit Report: Small Farmer Credit and Rural Development Project, Report No. 4419, March 1983. Project Performance Audit Report: Sixth Livestock Development Project, Report No. 6126, April 1986. Project Completion Report: Livestock and Agricultural Development Project, Report No. 6546, December 1986. Project Completion Report: Second Rural Development Project, Report No. 6545, December 1986. Project Completion Report: Agricultural Credit Project, Report No. 7233, May 1988. Project Performance Audit Report: Agricultural Credit Project, Report No. 9738, June 1991. Project Completion Report: Seventh Livestock Development Project, Report No. 11938, June 1993. Schedule D Page 1 of 2 THE STATUS OF BANK GROUP OPERATIONS STATEMENT OF BANK LOANS AND IDA CREDITS (as of December 31, 1993) PARAGUAY Amount (less cancellations) -----US$ million -------- Loan Fiscal Number Year Borrower Purpose Bank IDA Undisbursed 2087 1982 Paraguay Caazapa Area Development 31.0 - 0.7 3445 1992 Paraguay Land Use Rationalization 29.0 - 28.5 3519 1993 Paraguay Third Water SuppLy 23.0 - 22.8 3685 1994 Paraguay Highways VIII 65.0 - 65.0 Fully disbursed loans (25) and credits (8) 386.5 49.8 0.0 Total 534.5 49.8 of which has been repaid 282.8 11.7 Total now outstanding 251.7 38.1 Amunxt sold 1.3 - of which has been repaid 1.3 - Total now held by Bank & IDA 250.4 38.1 Total undisbursed 117.0 Schedule D Page 2 of 2 THE STATUS OF BANK GROUP OPERATIONS STATEMENT OF IFC INVESTMENTS (as of December 31, 1993) PARAGUAY Original Cammitments CUSS million) Total held by Total Year Obligor Type of Business Loan Equity Total Syndications IFC Undisbursed 1975 F1nap S.A. Lumber Products 4.40 1.00 5.40 - - - 1981/1986 Empresa Notelera Tourism 1.17 0.28 1.45 - - - Encarnacidn S.A. (EHESA) 1982 Sociedad AgrScoLa Food and 5.36 2.00 7.36 - 1.30 Golondrina S.A. Food Processing 1986 Western Agriculture 0.80 - 0.80 Agri-Producci6n and Livestock S. de R.L. Total Gross Commitments 11.73 3.28 15.01 Less Cancellations, Terminations, 10.43 3.28 13.71 - Repayments and Sates Total Comitments now held by IFC 1.30 0.00 1.30 1.30 B L I V I A .A / I AM~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~E R IC A CH A C O A.Si-) RWDX C---tt4g@ z4zA - ! _ot E s v~~~~~~~~~~~~I I a +x i \T Fe A A L T O i b \ | P A R A GA UAY { N U EiA ASUNC16SI.ON C.W Ai B RAA Z I L W~- w\- s r ITNOR SC ROADS _L,L'a~~~R E 0 f fAt \ B I OQ U E R FAN O S ND COS UCION COUNTRY BRN DIVISIONCONCEPCION w s ,Eo, C H AC W' s < SAN PEDiRO t~~~~~S CANINDY/ PARAGUAY SOUNOARIES NATURAL RESOURCESNATIONAL OUDIE 2t , ~~~~~~PROJECT AREA SAN RAFAEL NATIONAt PARK _/v. i_ BfUMNOS LSFCDOD -BITUMNOUSUFACED_ROADSUNDER_CONS_RL_CTION SItA RAltROADS }>5 6!- fl Sr li w 0I* 6? 0b 5 55'*'i #4i''::X< : 8- iiII v-#4 IBRD 24303 5A'2 < < ) { ~~~ALTO < 2z- A>N ARANA R ROAD -PAOPOSEADE ROADS --- DRY-WEATHER R-OADS EZJ SAN RAFAEL |IONAL PARK - -DEPARTMEr BOUNDARES - -INTERNATIONAL BOUNDARIES 0 1 0 20 30 40 50 &,w o plf. Ae pot of the Wad &mk ,so. oi4jdg s o of*sy s*e y ynyh / mooor sf 54' ~~~27- NOVFMRER 1992